Mutual funds churn portfolio as equity flows see further moderation

Fund houses are churning their portfolios in anticipation of higher volatility in the run-up to the general elections and equity flows seeing further moderation.

In January, fund managers increased their exposures to private banking majors like Axis Bank, ICICI Bank and HDFC Bank. Meanwhile, IndusInd Bank and YES Bank saw some reduction in exposures.

In the auto sector, fund managers trimmed their exposure to Maruti Suzuki.

Within the information technology (IT) sector, mutual funds (MFs) added Infosys, while reducing exposure to Wipro and HCL Technologies. However, sectoral exposures of top-five mutual funds at the end of January show that fund houses have held onto their underweight stance on IT, auto and banking and financial services.

Among the commodity-related stocks, fund houses added Coal India, ONGC, IOC, Hindalco and JSW Steel. Exposures to Gail and BPCL were reduced. Among the consumption names, funds added ITC, Asian Paints, Hindustan Unilever, Nestle India and Jubilant FoodWorks.

The MF industry witnessed deceleration in equity inflows for a third straight month in January. The flows into equity schemes, which includes tax-saving schemes, stood at Rs 6,158 crore. This was the lowest tally since February 2017.